Major changes in TRAI

Sudarshana Bannerjee

NEW DELHI: M.S. Verma, chairperson, TRAI, and members Ravi Kant, Rakesh Mohan, and Prof. V.S. Raju will end their respective tenures as members of TRAI by the end of March. Of the five-member team, R.R.N.Prasad’s tenure is already over. Nobody seems to know what is happening next, especially so as Arun Shourie has taken over the ministry from Mahajan, and is rumored to spend more time at the disinvestment ministry as of now. The TRAI chairman, M.S. Verma, refused to comment on who would constitute the new team or on the Interconnect disconnect the new members will inherit. "As far as I am concerned, I am on duty now, and I will be on duty till the last day of my tenure," said Verma.





Interconnect apart, the new officials of TRAI also has a distributed regulation structure to ponder over. The department of telecom (DoT) issues licenses, TRAI is expected to regulate, and take action if it finds an incongruity, the Telecom Dispute Settlement Apellate Tribunal (TDSAT) is expected to settle disputes. With someone else distributing licenses (never mind if there are far too many players in a given circle) and the operators moving TDSAT the moment it agrees to disagree with TRAI (never mind whether TRAI has a ratiocination behind its directives), where does it in effect leave the regulatory body? "Fragmented market and fragmented licenses are the two legacies of TRAI. And ‘level playing field’ is of course the headache of the regulator. But we cannot perform miracles. Did anybody ask us before issuing licenses?" questions Verma. And he might have a point. There is definetly a tendency of passing the problem parcel in the various departments within our communications ministry. Compare the India scene to say UK, where the Office of Telecommunications (OFTEL) is the single regulator for the telecommunications industry; or the US, where the Federal Communications Commission (FCC) handles all telecom regulated issues.





Talking about the ‘little period of discontent’ over the Interconnect Usage Charges (IUC) wrangle, Verma said that all TRAI actions are long term, focusing on "sustained availability and sustained affordability of services." "Reliable cost data is also one of the major issues before the regulator today," says Verma. Of course TRAI draws the necessary lines with the details it has at its disposal, which should be accurate, but is not necessarily so.





TRAI also has to worry about the PSU incumbents MTNL and BSNL. According to a McKinsey report, in geographies with high teledensity, the incumbents tend to occupy leadership positions. Not so for us. Both MTNL and BSNL have astronomical capex and opex figures, thus pulling up the cost of service. In terms of technology, the fact that MTNL was considering WAP for its mobility customers, when the private players had already deployed GPRS, explains the lag. "I do not see the incumbents losing more than 12 per cent market share in the next 3 to 5 years," assures Verma. If Shourie pushes through the privatisation of BSNL, there may be some hope, but as matters stand, MTNL and BSNL will continue to be TRAI’s problem child, you cannot subsidise your way to market or technology leadership.





Can’t the present team, more so the chairperson, continue till the time sanity returns in the IUC world, all the more so as several cases are still pending with TDSAT? Under the Telecom Regulatory Authority India AcT, 1997, the TRAI chairperson and the members held office for five years or till they were 65 years of age. But under the TRAI (Amendment) Ordinance 2000, the tenure of both the chairperson and the members was brought down to three years. A highly placed source with TRAI informs that though there are speculations abound, nobody within TRAI is aware of who the next set of officials would be.





The TRAI (Amendment) Ordinance 2000, stipulates – "The Chairperson and other members of the Authority shall be appointed by the Central - Government from amongst persons who have special knowledge of, and professional experience in telecommunication, industry, finance, accountancy, law, management or consumer affairs." It goes on to say – "Provided that a person who is, or has been , in the service of Government, shall not be appointed as a member unless such person has held the post of Secretary or Additional Secretary, or the post of Additional Secretary and Secretary to the Government of India or any equivalent post in the Central Government or the State Government for a period of not less than three years." But can a non-telecom board of members be safely entrusted with regulating the telecom future of the country? "Once as a matter of policy, a regulator is made up independent, we should continue with that trend," sums up Verma.





During his infamous meeting with the cellular operators over the interconnect wrangle, the then Minister, Pramod Mahajan, had elaborated to the media that if a representative from the industry was willing to be on the TRAI board, he would consider. But it is highly unlikely that a industry representative would offer to be on the TRAI board given that the Ordinance specifies that a person appointed as Chairperson or a member will have to vacate their respective offices and as such shall be entitled to claim compensation not exceeding three month pay and allowances for the premature termination of the term of their office, or any contract of service."





TRAI has to get its act together, and fast, telecom may be a high growth sector, but the players are still not making profits.